Nannapaneni Nageswara Rao v. State of Andhra Pradesh
2021-03-24
M.SATYANARAYANA MURTHY
body2021
DigiLaw.ai
ORDER: 1. This writ petition is filed under Article 226 of the Constitution of India, seeking the following relief: “Writ of Mandamus or other appropriate writ order or direction declaring the proceedings in Rc.No.591/2020-S8 dated 16.10.2020 issued by the 3rd respondent herein suspending the Form-B licence issued in favour petitioner for distributing the Gas Cylinders through M/s Royal Gas Agency under the provisions A P Petroleum Products Licensing and Regulation of Supplies Order 1980 is illegal arbitrary unreasonable and violative of Articles 14 and 19g of Constitution of India and consequently set-aside the proceedings in RCNo.591/2020-S8 dated 16.10.2020 issued by the 3rd respondent herein.” 2. The petitioner -M/s. Royal Gas Company obtained gas agency from M/s. Hindustan Petroleum Corporation Limited is running the said agency from 28.05.1984 by obtaining permissions from competent authorities from time to time. 3. While so, on 14.10.2020, the fifth respondent/Civil Supplies Deputy Tahsildar (CSDT) along with the officials of Vigilance & Enforcement, Guntur conducted surprise inspection of the petitioner gas agency and found the following variations. Sl. No Description Domestic LPG cylinders Commercial LPG cylinders 5 kgs capacity commercial cylinders Regulators Full Empty Full Empty Full Empty Sound defective 1 As per Register 860 42 380 176 329 7 399 102 2 Ground Stocks 826 70 370 10 Issued 172 329 7 399 102 Variation (-)34 (+)28 NIL (-4) NIL NIL NIL NIL 4. Though the petitioner explained to the 5th respondent with details of stocks available in the gas agency, the 5th respondent seized the available ground stock of LPG cylinders worth Rs.11,09,087/-from the gas agency and handed over the same to one Sri B.R.S Reddy, Proprietor of M/s. Rama Krishna HP Gas Agency for temporary custody and filed a report under Section 6-A of Essential Commodities Act, 1955 before the District Collector, Guntur to confiscate the entire seized stock to the Government and also the 5th respondent herein/CSDT, Guntur submitted a report to the District Collector to initiate necessary disciplinary action against the petitioner for the alleged irregularities. 5. Further, basing on the report of the 5th respondent herein/CSDT, Guntur, the third respondent/Joint Collector & Additional District Magistrate issued proceedings vide Rc.No.591/2020-S8 dated 16.10.2020 suspending Form-B license issued in the name of this petitioner, during pendency of the disciplinary proceedings, directing him to submit his written explanation for the charges levelled against him in the said notice.
5. Further, basing on the report of the 5th respondent herein/CSDT, Guntur, the third respondent/Joint Collector & Additional District Magistrate issued proceedings vide Rc.No.591/2020-S8 dated 16.10.2020 suspending Form-B license issued in the name of this petitioner, during pendency of the disciplinary proceedings, directing him to submit his written explanation for the charges levelled against him in the said notice. Questioning the said proceedings Rc.No.591/2020-S8 dated 16.10.2020, the present writ petition is filed requesting to declare the same as illegal, arbitrary and with a consequential direction to set-aside the same. 6. The third respondent filed counter affidavit, denying material allegations inter-alia contending that, since the petitioner violated the license conditions, a report was submitted for taking disciplinary action during pendency of the disciplinary proceedings and Form-B license of the petitioner’s agency was suspended not under Section 6-A proceedings. Therefore, there is no irregularity or illegality in the order passed by the respondents and requested to dismiss the writ petition. 7. During hearing, Sri P. Durga Prasad, learned counsel for the petitioner contended that, when the supply boys went out for delivering cylinders to the customers, even without waiting for their return, report was prepared and the report did not disclose the exact details. However, as seen from the show cause notice issued to this petitioner, it is clear that, it was issued in the proceedings initiated under Section 6-A of the Essential Commodities Act and a reply was issued by this petitioner to the show cause notice. However, the order impugned in this writ petition was passed by the respondents on 16.10.2020 in the proceedings initiated against this petitioner under Section 6-A of the Essential Commodities Act. Hence, learned counsel for the petitioner contended that, passing such an order impugned in the writ petition is an illegality and requested to set-aside the same. 8. Whereas, learned Assistant Government Pleader for Civil Supplies would contend that, when the petitioner has committed a serious irregularity in distribution of gas cylinders, his license is liable to be cancelled, in view of Regulation No.29(2) of the Andhra Pradesh Petroleum Products (Licensing and Regulation of Supplies) Order, 1980 (for short ‘the Supplies Order, 1980’) and accordingly the impugned proceedings were issued suspending Form-B license issued in favour of this petitioner during pendency of the enquiry. 9.
9. Considering rival contentions, perusing the impugned order Rc.No.591/2020-S8 dated 16.10.2020 and show cause notice reply thereto, the point that arises for consideration is: “Whether the order impugned in the writ petition is passed in proceedings initiated under Section 6-A of Essential Commodities Act or any disciplinary enquiry is initiated against this petitioner by the respondents in terms of Clause 20(i) of the Andhra Pradesh Public Distribution System (Control) Order, 2018 (for short ‘Control Order, 2018’). If so, whether the order passed under Section 20(i) of the Control Order, 2018 and whether suspension of Form-B license of this petitioner be sustained under the impugned order?” POINT : 10. Issue of cylinders in the premises during inspection under the cover of panchanama is not in dispute. Similarly, issue of show cause notice in Rc.No.591/2020-S8 dated 16.10.2020 calling the explanation of this petitioner in the proceedings issued under Section 6-A of Essential Commodities Act and framing of charges, submitting an explanation to the show cause notice on 19.10.2020, passing the order impugned in the writ petition are not in quarrel. 11. The only contention before this Court is that, when the show cause notice was issued under Section 6-A of the Essential Commodities Act, which is limited to ordering confiscation of the property seized under the Essential Commodities Act, cancellation of license is beyond the scope of enquiry under Section 6-A of the Essential Commodities Act. 12. A bare look at the subject mentioned in the show cause notice, it appears that the fifth respondent/CSDT submitted a report for initiation of proceedings under Section 6-A of the Essential Commodities Act and also recommended for disciplinary action against the petitioner’s gas agency. In the last paragraph of second page of show cause notice dated 16.10.2020, it is clearly mentioned that, in view of the alleged irregularities, the inspecting officers came to a conclusion that the petitioner gas agency failed to maintain the records properly which lead to shortage of 34 full domestic LPG cylinders, excess of 28 empty domestic LPG cylinders and shortage of 4 empty commercial LPG cylinders and also failed to update the stock-cum-price board in the agency.
Hence, the fifth respondent/CSDT seized the above available ground stock of LPG cylinders worth Rs.11,09,087/-from the gas agency and handed over the same to one B.R.S. Reddy, proprietor of M/s. Rama Krishna H.P. Gas Agency, Mangalagiri for temporary safe custody under proper acknowledgment and filed a report under Section 6-A of the Essential Commodities Act, 1955, before the District Collector Guntur requesting to confiscate the entire seized stocks to the Government. It is further averred in the first paragraph of last page of the show cause notice that the CSDT submitted a report requesting to initiate necessary disciplinary action against the petitioner for the irregularities committed by him. The petitioner submitted an explanation on 19.10.2020. However, even before receipt of the explanation, the order impugned in the writ petition is passed. 13. A bare look at the subject column in the order, there is a reference about 6-A proceedings and also recommendation for initiating necessary disciplinary action against the gas agency. Similarly, same set of allegations are made in the show cause notice regarding seizure and entrustment of stock to one B.R.S. Reddy, proprietor of M/s. Rama Krishna H.P. Gas Agency, Mangalagiri for temporary safe custody, requesting to initiate necessary disciplinary action and suspending the Form-B license order. 14. In view of the allegations made both in the show cause notice and the order impugned in the writ petition, it is necessary to advert to the proceedings mentioned in the reference. In the reference, the CSDT, Mangalagiri submitted a report dated 15.10.2020 and the same was received by the Joint Collector on 15.10.2020 itself. So, it is clear that the fifth respondent/CSDT submitted only one report i.e. either for initiation of proceedings under Section 6-A of Essential Commodities Act or for initiation of disciplinary proceedings. 15. According to Clause 20(i) of the Control Order, 2018, the inspecting authorities as and when found contravention of the provisions of the Control Order shall submit necessary inspection reports for initiation of disciplinary action under the Control Order. In case of seizure of scheduled commodities, for any violation or contravention of the provisions of this Order, a report of seizure shall be submitted to the Collector/Joint Collectors, as the case may be, for initiating the action under section 6-A(1) of the Essential Commodities Act,1955.
In case of seizure of scheduled commodities, for any violation or contravention of the provisions of this Order, a report of seizure shall be submitted to the Collector/Joint Collectors, as the case may be, for initiating the action under section 6-A(1) of the Essential Commodities Act,1955. Simultaneously, a separate report shall be filed for initiation of disciplinary proceedings against errant dealer under the provisions of this Order and for violating the conditions of authorisation. 16. Thus, one report is for initiation of proceedings under Section 6-A of the Essential Commodities Act and simultaneously, another report is for initiation of disciplinary proceedings against the errant dealer. 17. As seen from the reference both in the show cause notice and in the order impugned in the writ petition, only one report is submitted by the fifth respondent/CSDT and proceedings under Section 6-A of the Essential Commodities Act were already initiated. It is not known whether any disciplinary proceedings are initiated or not. But, in the counter affidavit, the respondents asserted that a report was filed for initiation of disciplinary proceedings by the fifth respondent/CSDT in the reference of show cause notice. But, show cause notice disclosed submission of one report may be either for initiation of proceedings under Section 6-A of the Essential Commodities Act or disciplinary action. But, no material is produced when a disciplinary action is initiated and such an enquiry in the disciplinary action is not brought to the notice of this Court as on date. But, as seen from the impugned order, so also, the show cause notice issued, it is evident that proceedings under Section 6-A were already initiated and therefore, the impugned order suspending Form-B license was issued by the respondent in the proceedings initiated under Section 6-A of the Essential Commodities Act, but not by submitting any report under Clause 20(i) of the Control Order, 2018. In addition to the report for initiation of the proceedings under Section 6-A, as mandated under Clause 20(i) of the Control Order, 2018, passing an order of suspension of Form-B license, is a serious illegality, since 6-A proceedings only permits ordering confiscation of essential commodities or other vehicle etc. The Joint Collector is not competent to pass an order of suspension while exercising power under Section 6-A of Essential Commodities Act.
The Joint Collector is not competent to pass an order of suspension while exercising power under Section 6-A of Essential Commodities Act. However, Clause 8(4) of the Control Order, 2018 permits the Joint Collector to pass appropriate order for suspension or cancellation of authorization during pendency of enquiry. But, it is only in case of disciplinary proceedings initiated under Clause 20 of the Control Order, 2018. Therefore, the suspension of Form-B license is an illegality. 18. Learned Assistant Government Pleader for Civil Supplies drawn attention of this Court to Regulation No. 28 of the Supplies Order, 1980, to support the action of the respondents. Regulation No.28 deals with Contravention of conditions of License/ Registration Certificate/Supply Card/Provisions of this Order. According to it; (1) Notwithstanding any thing contained in Clause 28 where a licensee or holder of a registration certificate or supply card has been convicted a Court of Law in respect of any of the provisions of the Essential Commodities Act, 1955 (Central Act, 10 of 1955) the licensing authority may by order in writing cancel his licence or certificate or supply card issued under this Order. (2) Pending action as in sub-clause (1) above, the licensing authority may, for reasons to be recorded in writing, order an interim suspension of the licence, registration certificate or supply card for the duration of the proceeding in the Court. Provided that where such conviction is set aside in appeal or revision, the licensing authority shall, on application by the person whose licence or registration certificate or supply card has been cancelled, re-issue the licence or registration certificate or supply card to such person. 19. Taking advantage of Regulation No. 28 of the Supplies Order, 1980, learned Assistant Government Pleader for Civil Supplies contended that, interim suspension of gas agency in Form-B can be passed and accordingly, the fourth respondent/Joint Collector passed such an order in the proceedings initiated against the petitioner, under Section 6-A of Essential Commodities Act. 20. No doubt, an order of suspension can be passed if the proceedings are initiated under the Regulations of Supplies Order, 1980. In fact, there is no reference either in the show cause notice or in the order impugned in the writ petition about contravention of the Supplies Order, 1980.
20. No doubt, an order of suspension can be passed if the proceedings are initiated under the Regulations of Supplies Order, 1980. In fact, there is no reference either in the show cause notice or in the order impugned in the writ petition about contravention of the Supplies Order, 1980. But, for the first time, such contention is urged before this Court even without raising such contention in the counter affidavit or intimating the same in the show cause notice about violation of conditions of license or certificate of registration. Therefore, such contention cannot be accepted, as the respondents cannot supplement a different reason which is not mentioned either in the show cause notice or in the writ petition by way of argument for the first time during hearing. Hence, the contention of learned Assistant Government Pleader for Civil Supplies about contravention of Supplies Order, 1980 and action taken is illegal and arbitrary. 21. As discussed above, in the absence of initiation of any disciplinary proceedings and producing any material to substantiate that such contention of initiating disciplinary action against this petitioner in terms of Clause 20 of the Control Order, 2018, the order impugned in the writ petition can be said to be an order passed in the proceedings under Section 6-A of the Essential Commodities Act, which is limited to order confiscation of essential commodities seized during inspection and it does not confer any power on the enquiring authority to cancel or suspend the license for violation of the regulations referred above. Hence, the order passed by the respondents is illegal, arbitrary and violative of Articles 14 and 19(g) of the Constitution of India. Consequently, the same is liable to be set-aside. 22. In the result, writ petition is allowed, declaring the proceedings in Rc.No.591/2020-S8 dated 16.10.2020 issued by the 3rd respondent as illegal, arbitrary and violative of Articles 14 and 19(g) of Constitution of India and consequently set-aside the same. However, this order will not preclude the respondents to take action against the petitioner in case he is found guilty in any other violation. 23. Consequently, miscellaneous applications pending if any, shall also stand closed.